Should You Have a Credit Card as a Student?

When you are in college, it may seem like you have mountains of debt to deal with. Your expenses probably greatly exceed your income, thanks to all the school fees, the cost of books, rent, food and various other expenses. That’s why many college students are tempted by the numerous credit card offers they receive.

Now these cards can be beneficial, but they also come with their disadvantages. We’re going to look at the pros and cons of having a credit card as a college student.

Let’s start with the positives. The big benefit to having a credit card is that it will help you defer a lot of your debt. Your daily, weekly and monthly expenses can add up, and the card allows you to put a lot of it off and just pay on the interest. That’s a good short-term solution, and it may actually help you survive college on a low-paying job. After all, most people don’t get very good jobs until after they have graduated from college.

Your card can also allow you to carry out transactions you wouldn’t otherwise be able to do. If you were just using cash, you wouldn’t not be able to make purchases online. By using your card to purchase online, you can find the best deals on books and other essentials. You can also make payments quickly without having to pay for transport or to risk getting your payment in late.

The card also allows you to make payments for things you need before your check comes in. It’s kind of like payday loan in a way. You can put the expense in your card and then take care of it later once your check arrives.

Of course, there are downsides to having a credit card in your college years. The big one is how much it is going to cost you. Yes, it helps to put your debt off for a while on the card, but the interest rates may really cripple you later.

Most college students are not being offered credit cards with very good interest rates, and a personal loan may be a more cost-effective option if you need finance. If you are still using the same card you got as a student for years after you graduate, you may want to examine the interest rates and try to find something cheaper.

Because you put a lot of your expenses on your credit card, you may have trouble paying them back on time. You may start to miss payments or you may end up paying less than the minimum. This is going to hurt your credit score, which will hinder your chances for taking out a loan, getting a better credit card or even opening the kind of bank account that you want.

Getting a credit card while you have little money to spend can also be a big temptation. You may feel like you can just put your frivolous expenses onto your card and not worry about the cost until later. This is going to catch up with you quickly though. If you max out your credit cards, you will lose your leeway and you may not have the money you need available when you actually need it. It can also hurt your credit score, as overspending on credit cards can make them hard to repay on time.

As useful as credit cards can be to college students, they also pose some dangers. Make sure you know what you are getting into before you sign up for one.